Say goodbye to 1,000 stores that cater to low income households. Blame management, poor conditions, and rat infestations. The word is mismanagement.
Years of mismanagement have finally taken a toll on Family Dollar reports CNN.
Family Dollar, the struggling discount chain that caters to low-income customers predominantly in cities, said Wednesday it will close nearly 1,000 stores.
Family Dollar, which is owned by Dollar Tree, was recently fined more than $40 million for a rat infestation at a warehouse that forced hundreds of stores to temporarily close.
Family Dollar will close 600 locations this year and 370 stores over the next several years as store leases expire. Family Dollar has around 8,000 US stores. Dollar Tree also said it will close 30 stores as leases expire.
Family Dollar stores were in worse condition than Dollar Tree expected when it acquired the business, analysts say. Even though Family Dollar has renovated thousands of stores in recent years, many stores are still poorly maintained. Stores are often understaffed and boxes block aisles.
Family Dollar, Dollar Tree, Dollar General and other discount stores have had longstanding theft issues, operating stores with just a handful of employees who have at times been victims of violent robberies and other crimes.
Dollar Tree employees have complained about unsafe working conditions, and OSHA last year criticized the company for a “continued disregard for human safety” that “suggests the company thinks profits matter more than people.”
Family Dollar was hit with a record fine this year for violating product safety standards after selling items that were stocked in a rat-infested warehouse in West Memphis filled with live, dead and decaying rodents.
Dollar General has opened about 1,000 stores a year, making it the fastest-growing retailer in the United States. The company has around 18,000 stores. The companies are battling for many of the same low-income shoppers. Despite the name, these stores sell mostly food and everyday items for between $1 and $10.
Family Dollar has lost ground to Dollar General, in particular due to prices: Family Dollar’s prices can be 10% to 15% higher than Dollar General’s and other discount competitors. Dollar General, which is more than double the size of Family Dollar, can offer lower prices because of its scale.
If there is a reason for Family Dollar to exist at all, what is it? And if you are thinking of shopping at one, please read the above once more.
But proving that people will buy anything, I present …
Dollar Tree Monthly
The reported PE is 24.41, not a bargain at all, even after today’s action.
Dollar Tree Daily
How long before people buy this dip?
Goldilocks View Is Pervasive
Yahoo!Finance is touting 11 Oversold NASDAQ Stocks To Buy Right Now
On March 12, Gabriela Santos, chief market strategist at JPMorgan, joined CNBC’s “Closing Bell” to discuss her thoughts on the current outlook and market. Here’s what she had to say:
“We do sound positive, first on the fundamentals. For the economy, we see growth normalizing this year 2%, but zero recession in our base case. We see inflation also moderating towards 2% by the end of the year, so you still have a pretty resilient nominal growth backdrop for companies, so resilient revenue growth. At the same time, it seem to us that the big takeaway from fourth-quarter earnings was a bottoming in the margin contraction from last year.”
The highlights above show that a positive trend for stocks should continue as we move forward into 2024, which should be encouraging for investors looking to buy into the market. Considering the upside gains in the NASDAQ being seen so far, this index may be a good place to start for those looking to buy.
Is there anyone who has not endorsed the soft landing thesis?
Soft Landing Runway
Let’s check in with former Fed Vice-Chair Alan Blinder and his soft landing thesis.
“The Fed has Already Achieved a Soft Landing” says Alan Blinder.
The overwhelming consensus view is the Fed has inflation licked, the softest of soft landings is here, no recession is in sight, and nothing can go wrong in the stock market.
I disagree on all four.
Alan “Blinder”. What an apt surname for someone who refuses to take the blinders off.
It never made any sense for Dollar Tree to buy Family Dollar. There’s few synergies with either of the companies. It made sense for Dollar General to buy them but the purchase price got out of hand. Dollar Tree should spinoff the Family Dollar business and be done with it.
The merger cost was over financed and when you have to many chiefs and not enough workers top management stills gets a raise !
The inflationary depression ravages on full speed ahead.
Oh no if they close 1000 Family Dumpers where will all that Chinese junk go? Make a big pile of it and open a ski resort. lift tickets are not cheap.
MSFT [1W] made a new all time high. If Fri close > Feb 5 high good things can happen.
If not, in order to move down there must be a weekly close < Mar 11 (this week) low.
They are also getting killed by having virtually no on line presence. Has anyone every purchased something on line from a dollar store?
They don’t have enough employees in the stores. How could they possibly handle online business?
Online is NOT what these stores do.
Yes.
Works fine.
They also went overboard on Biden-Shrinkflation. Prices up, size down. Just not worth it anymore.
The stores are closing in inner cities because of rampant shoplifting. Then the communities and their community leaders (race hustlers) complain about being under served. They ponder, “What has happened? Why has our manna from heaven disappeared? Must be racism!” Same old tired tale…
I’ll take unsubstantiated racism for $1000 Alex.
DLTR cuts unprofitable stores, prepares for a potential recession, while DG expands.
A decade ago Starbucks expanded in every corner to block and destroy other coffee shops, in a killing fire. They got killed themselves.
Biden Nippon steel will not buy US steel. America needs strong steel companies powered by American steel workers.
…who are powered by great pensions and medical insurance with COLAs on both.
Family Dollar / Dollar Tree recently opened a 1.7million sq. ft. distribution center in Ocala, FL. The place is HUGE. People like to complain about these $1 discount stores, but they serve a need in many communities of which there are very limited options. Some rural communities only have a mini-mart gas station to shop at. No doubt that obtaining and maintaining help is a problem, just as the case of fast-food restaurants.
Ocala, FL.
Now that’s centrally located.
Great for reduced shipping costs.
I smell a rat. I wonder if some lobbying is involved: $40,000,000 fine for one warehouse with rats?
As I read the article, it wasn’t the existence of rats but failing to handle it properly – it was the gross disregard for the health & safety of their customers that earned them the fine.
Seems like an exorbitant fine for a low margin retailer.. does JP Morgan even get fined that much when they rip off investors.. LOL.. just the publicity alone regarding this rat situation has to make their viability precarious.. hence the closings of many marginal stores.. how about instead of finding them 40 million you charge them a substantially lesser amount to oversee they come to health and safety requirements
The slaughter in the retail sector sleaze meter cont. Amazon is trying to reach/breach July 2021 high. Wonder if they can.
0% chance of a recession? Even if you are an optimist there is always a low % chance of a black swan causing a sudden recession. Throw in a massive debt, deficit, election year, Taiwan, Gaza, Ukraine, problems in China, high P/E risk of Stockmarket correction, NK, Iran and thousands of possible terrorists in the 10 million illegals (another 9/11) and I’d take the odds of another recession as being more than a low%. And if the analyst was wrong at 0% then everything that they access after that is garbage.
Perhaps their business loans were refinanced at a higher rate so the business model could not afford excess locations. Wall Street is going to learn a thing or two about business in the real world.
Where are they located? I would bet a hot dollar it’s in majority black communities because that’s where most retail stores are closing due to theft.
I think things went really south for the company when they raised the prices to $1.25.
There are a slew of products that might be considered worth buying at $1 but don’t make the cut or make the products uncompetitive when the price gets increased to $1.25.
For example, you can buy 16oz of pasta for $1 everywhere. But now FD has to sell that weight at $1.25 which makes them non-competitive. Same with a can of tuna. Chunk light 5oz size is available for anywhere between 69 to 99 cents in many stores. But FD again has to price the same can at $1.25.
I could have enlightened FD on this pricing issue had they only checked with me prior to raising their prices to $1.25!
Also include all the products that disappeared when the retail price went to $1.25.
DollarTwentyfiveCent Tree should have never bought Family Squalor.
They were by far the best of these type of stores and had solid repeat business, needing no additional locations to thrive and grow.
They shot themselves in the foot, failing to upgrade anything, competing against themselves, and adopting the diseased state of their ‘acquisition’.
It compares to the disasterous idiocy of when eBay bought Paypal.
I can’t for the life of me comprehend how or why such an iconic quality, successful business looses it’s direction at the top of it’s construct and makes such hideous choices.
It’s like they were infiltrated.
Also consider GM, GE, Boeing……..and the list goes on and on…..
that’s what happens when engineers and visionaries (doers) get replaced by bean counters
The stores are being closed because of theft. The stores are understaffed, and everyone knows it.
Until people feel they can get a decent deal on their everyday shopping, no amount of statistical propaganda will make them feel a sense of prosperity.
But for a healthy local economy with decent prices, communities need multiple competing providers for key goods and services (food, gas…).
Minimizing crime is essential to bringing back the additional businesses needed to create the necessary competition.
We visit the Dollar Tree stores in both small towns that we live in (Cal, and Oregon). They have KILLER deals on Pretzels, Aluminum Foil, cheap table cloths for Beach Parties and so on. The stores Are BOTH a mess, with stock piled up. They cannot find good help.
I once ran a marathon in Munich, Germany. I learned a whole bunch of things. First, don’t drink the water the locals are handing you. A teamie far behind did that as the Germans had run out of bottle water. The next day, wifey and I left him behind in agony as we rented a BMW and headed off for Vienna. Second, nobody remembers who came in third. I can prove that. Munich, 1972, Frank Shorter wins the gold. Hostages taken. Who came in third?
Mamo Wolde came in 3rd in the marathon at the 1972 Olympics in Munich.
Regarding “The Fed has inflation under control” Milton Friedman told us that inflation is caused by government spending + the Central Bank providing the money for that, monetizing the spending.
When the Fed increases interest rates that sends two signals. Only one of those signals is getting through = private sector aggregate demand is restrained, giving the government spenders space to obtain goods without competing with others and driving up prices, inflation. – Apparently helping the soft-landing, for now, is that aggregate supply is increasing “enough”.
A truism: More for government purposes, less for our purposes.
There is no way there will be a soft landing. I think we’re in a recession now and will be in a depression in the next few years.
and likely a total collapse of society shortly after
Clear a free fire zone and lay concertina wire around the Democratic cities. Normal civilization won’t suffer.
Friend works for an “office supply” chain and they are doing hundreds of price changes daily, some 50% higher. The leaps are insane and on items that were already overpriced. Inflation 2% my eye.
will they be reopening as ten dollar tree and family ten dollar?
or maybe benjamin tree and family benjamin?
and yes, we have achieved soft landing for the previous problem. we are currently into the next problem. we can’t be in soft landing mode forever.
Well items at the dollar tree aren’t a dollar anymore. Everything is priced @ $1.25 at my local dollar tree. I go there to buy cheap throwaway plastic tablecloths for painting and staining my woodworking projects.
And light bulbs. Cheapest price…
You pay a dollar per apple, sweet potato, pear, or avocado here.
TenDollar Tree will be easier to fix the signs than DollarTwentyfiveCent Tree.
The Family Dollar reddit was shut down, but there was a post last year from a store manager trying to get advice from other store managers on how to retain and recruit people. It’s kind of hard to do that when corporate only wants to pay minimum wage.
So it falls on these hapless managers to get creative and try to keep people while only offering starvation wages. When they succeed, it works out well for the shareholders.
If you pay a high enough wage and offer decent working conditions, you can get the all the workers you need.
They are not interested in full time employees, only part timers so they don’t have to pay any benefits.
Maybe FJB can get the “New Arrivals” to help with the labor shortages.
It’s not easy to hire “newcomers” that don’t have documents to legally work in the US and don’t speak English.
Old Joe said that’s beneath them I think…
You’re supposing that they’re here to work? I think not. Research “Cloward-Priven strategy.” Makes everything clearer.
Typical rabid case of denial by market “hype artists.” Not sure why anyone would listen to them.
Entire store (Dollar General) quits citing overwork and underpay.
https://www.nbcchicago.com/news/local/overworked-and-underpaid-entire-staff-at-dollar-general-store-in-wisconsin-quits-at-same-time/3380801/
Same symptom of a chronic labor shortage problem that will only get worse not better. The first to feel the pain will be the poor and rural areas followed by mid-sized towns. Many will ultimately flee to large cities because that’s where all the stuff is going to be and the most customers for firms to make a profit.
Except everyone is fleeing the large cities for good reason. I think the stuff is ultimately going to be in the far flung suburbs or smaller cities in the 100k range. In my neck of the woods the city is dying and the exurbs are booming.
Not really. It’s impractical to setup stores in far suburbs just as it is in rural areas which is why 1000 stores are closing, business will chase the labor and customers. When I say cities, I don’t mean downtown areas, those places are dead, I mean inside the city limits with nearby suburbs the big winners.
Try getting same day Amazon service in rural or far suburbs, it’s not going to happen, especially if there are no drivers to take stuff way out there and gasoline is extremely expensive or everything is an EV with limited range.
the writing is on the wall.
And I hope that they go no further. Keep rural areas rural.
Yeah, so I live out in the country and my Wife has a 70mi drive everyday. My concern is the price of gas and the other concurrent vehicle expenses.
Also, when you live out in the country you need a more reliable vehicle because there are not as many mechanics and Tire Stores out in the sticks. Everything is so convenient in the city or in the burbs. It’s a balance I guess city vs more rural living. Also, as you get older it’s gets harder to be so car dependent.
… And yet, , , Dollar General was able to find replacement workers in several hours time and re-open the store sometime the next day. …
No, they cannibalized another store so now they have two stores running at half staff which will make those workers angry because they are doing double duty…rinse and repeat the cycle, more quits, more bifurcation, more crappy service then store closure.
That’s the process.
Another shining example of letting profits and greed drive the business. That is the capitalist way. And since you are at that, test your employees like crap. That will create motivation.
Watch the John Oliver special.
If I want serious analysis, I’m not watching a talk show clown.
The capitalist way is just what you are seeing at FG & DT. If you operate a business poorly you don’t make money and go out of business. For far too long zirp allowed these losers to survive. Now we see who’s been swimming with no trunks.